Economists have thought for a long time that people act rationally. Science has proven this wrong. People are inclined to ignore problems, act in their own interest and to be influenced by others. In short, people behave irrationally in lots of situations and remarkably – they do this systematically. This is why this irrational behavior of people is predictable.
Thus far the introduction from behavioral economics. Next up, the most important questions –can you use these insights in innovation and for your organization? The correct answer is: yes. Meanwhile there are concrete examples how new knowledge from behavioral economics can be used for successful innovation. A solid example is the framework of the Behavioral Insights Team.
The Behavioral Insights Team is a team established several years ago and is an initiative and common property of the British government, Nesta and own contributors. From the start their goal was to make public services more profitable and user friendly for civilians. They do this by redesigning public services based on ideas out of behavioral sciences. They’re so successful that they’ve established sister organizations in Australia and the United States.
The Behavioral Insights Team has developed a framework that can help apply these behavioral insights in companies and organizations. The framework is based on a solid and long scientific research project on human behavior, combined with practice applications. It works all the time, for every product or service. This is a short summary of the four parts of the ESTA framework.
1. Make it easy
- Make a product/service easier to use or a message easier to understand. We’ll take action more easily once it’s easy (and clear what we need to do). Think of services like HelloFresh or Senseo.
- Change the basic attitudes in order to encourage contemplated behavior. We tend to follow the path of a suggested option.
- Cut a complex goal in more manageable ‘pieces’. We find it easier to achieve complex goals once they’re cut into pieces. Besides, this is one of the most important requirements of the Design Thinking process – fast prototyping and testing to tackle complex problems.
2. Make it attractive
- Approach an individual personally in your communication and develop services for their individual needs. We respond more easily to messages or services that are custom-made. In England the amount of payment legal fines increased because of personalized text message. Perhaps not the merriest example, but it’s proof that this insight can change behavior.
- Give people something that heightens their sense of ownership so they appreciate it more. We tend to have more appreciation for things we already have than for similar things we don’t have yet.
3. Make it social
- Give people feedback on their behavior in comparison with their friends or colleagues. We are influenced by how we perform in comparison to others, especially to peers. Another example out of the UK: physicians prescribed less antibiotics once they heard that they’re in the top 20% prescribers of antibiotics in their region.
- Create fast feedback loops that enable individuals and organizations to monitor their performance. We’ll more likely reach our goals if we receive structured, timely feedback on how we perform in comparison to that goal.
4. Make it time bound
- Give people a head start so they’re inclined to finish off a process or task. A head start can help us reach our target in time by giving us the feeling we are progressing. A nice example here is the customer cards with 12 squares where 2 of them are already marked which is filled out faster than the customer card with 10 empty squares.
- Give people an expiration date or deadline for the use of a service or finishing a task. We’ll reach our goals faster when there’s a clear deadline.
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